Uzbekistan: Housing for Integrated Rural Development Investment Program - Tranche 1

Sovereign Project | 44318-023

Summary

The Program will help to strengthen the impact of the government's Rural Development Program (RDP) and Rural Housing Scheme (RHS) to improve rural livelihoods and living standards, including better coordination with the government's financial sector strategy and new Micro, Small and Medium Enterprise (MSME) Program. In the medium term, the MFF supports (i) access to affordable housing finance and housing (ii) improved local government capacity to implement integrated rural development strategies that focus on creating rural jobs; and (iii) strengthening the enabling environment for rural MSMEs.

Under the government's roadmap, inclusive rural economic growth will be supported through creation of direct and indirect jobs and other livelihood opportunities, expanded access to affordable housing finance, new improved housing and associated infrastructure and social services, and MSME development.

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Project Name Housing for Integrated Rural Development Investment Program - Tranche 1
Project Number 44318-023
Country Uzbekistan
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2775-UZB: Housing for Integrated Rural Development Investment Program - Tranche 1
Ordinary capital resources US$ 200.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Agriculture, natural resources and rural development - Agricultural policy, institutional and capacity development
Finance - Housing finance
Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The Program will help to strengthen the impact of the government's Rural Development Program (RDP) and Rural Housing Scheme (RHS) to improve rural livelihoods and living standards, including better coordination with the government's financial sector strategy and new Micro, Small and Medium Enterprise (MSME) Program. In the medium term, the MFF supports (i) access to affordable housing finance and housing (ii) improved local government capacity to implement integrated rural development strategies that focus on creating rural jobs; and (iii) strengthening the enabling environment for rural MSMEs.

Under the government's roadmap, inclusive rural economic growth will be supported through creation of direct and indirect jobs and other livelihood opportunities, expanded access to affordable housing finance, new improved housing and associated infrastructure and social services, and MSME development.

Project Rationale and Linkage to Country/Regional Strategy While Uzbekistan has achieved substantive gains in gross domestic product (GDP) growth (8.5% in 2010), led by services (11.2%), industry (8.4%), and agriculture (7.1%), living standards in rural areas continue to lag those in urban areas. Around 75% of the poor live in rural areas and rural poverty (22.2% in 2009) is decreasing at a slower pace than in urban areas (15.2% in 2009). The proposed project will support the government's strategy for more inclusive economic growth, improving rural job and livelihood opportunities, improving rural living standards, and addressing urban migration.
Impact Improved rural housing for targeted beneficiaries
Project Outcome
Description of Outcome Downstreaming of rural housing scheme for moderate and lower income beneficiaries, with a focus on women
Progress Toward Outcome During implementation of Tranche 1, the number of women, moderate- to low-income beneficiaries increased as the systems and processes identifying these people became more integrated into HIRD. In many instances, these people may not have met credit criteria, but methods were found to help overcome this hurdle such as gurantors. Further progress is expected for Tranche 2 and 3.
Implementation Progress
Description of Project Outputs

Housing loans provided by PCBs to targeted creditworthy subborrowers in rural areas

Improved capacity of local governments to prepare and implement integrated rural development plans and investment promotion strategies

Improved enabling environment for entrepreneurs and MSEs to expand or establish new businesses in rural areas

Status of Implementation Progress (Outputs, Activities, and Issues)

Under Component 1, site due diligence conducted in accordance with the ADB Safeguard Policy Statement (SPS) 2009 ensured that HIRD sites complied with the ADB SPS and related Uzbek laws and regulations. Use of extensive public advertising, social scoring and information technology solutions to assess mortgage applications has improved targeting. QQB delivered training on HIRD and credit appraisal and portfolio risk management processes to its branch managers, loan officers, and other staff. Efforts to improve creditworthiness for women applicants included promoting the use of cosigners and help to mobilize down payments. Under HIRD Tranche 1, 20% of HIRD 2012 beneficiaries are women, and 85% are moderate- to lower-income, up from 1% before the MFF. Standard bidding documents and templates were developed, consistent with ADB Procurement Guidelines (2010, as amended from time to time). Consultations with technical agencies, industry, contractors, and homebuyers have resulted in house design improvements to increase the cost effectiveness and environmental sustainability. The HIRD website will launch a public complaint system with e-tracking of follow-up action.

Under Component 2, local governments are developing and delivering community plans, land use arrangements, installation of infrastructure and social services, and is tendering housing contracts. Budget allocations are now made annually to relevant state entities and local governments to ensure site and services development for HIRD, and to fulfill Component 2 and 3 work plans. Hokimiyat capacity building and rural skills development are being delivered nationwide under specialized professional education programs. During Tranche 1, over 5,000 government officials, small contractors, and PCB officers (30% women) were trained on HIRD site selection and preparation, beneficiary, and contractor selection processes. Training curricula is being developed for results-based regional investment planning, with additional TA support. The Program also developed three intern programs.

Under Component 3, the government is implementing targeted measures to improve access to a broad range of financial services and to reduce bureaucratic bottlenecks for MSEs. In 2012 the government reduced license and permit requirements, simplified and reduced tax payments, and reduced inspections to lower MSE transaction costs. Programs to increase access to finance for rural MSEs, including existing and proposed ADB financial inclusion projects with emphasis on rural and women-owned businesses, are under way. To reduce small business barriers, pilots are being launched for online business registration and online property registration linked to collateral registries.

Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement FI-C
Indigenous Peoples FI
Summary of Environmental and Social Aspects
Environmental Aspects Environmental impacts are anticipated to be insignificant. QQB (the sole participating commercial bank) adopted an environmental and social management system (ESMS) with screening criteria and monitoring procedures to ensure that the subprojects have minimal or no adverse environmental or social risks.
Involuntary Resettlement Only land sites with no involuntary resettlement impacts will be considered. The ESMS has monitored this to be sure of this outcome.
Indigenous Peoples Only land sites with no indigenous peoples' impacts will be selected. The ESMS has monitored this to be sure of this outcome.
Stakeholder Communication, Participation, and Consultation
During Project Design Consultation with various stakeholders were undertaken during project design including community groups.
During Project Implementation

The Housing for Integrated Rural Development Investment Program continues to work with a number of stakeholders to help achieve the objectives of the program. This includes working with district hokimiyats, mahallas, branch offices of the women's committee, and local youth groups around beneficiary selection, site selection and other local issues.

Four missions have been undertaken to ensure effective implementation of Tranche 1 (December 2013, April-May 2014, August 2014 and September 2014). The missions in addition to meeting key government agencies also visited the houses and met with beneficiaries families and mohalla representatives, regional governments and contractors etc.

Technical and Financial Performance Review (2009-2011) has commenced and the firm has submitted its Mid Term Report. The draft final report is expected to be submitted by 31 March 2015.

Business Opportunities
Consulting Services The procurement review for effective project implementation (PREI) of the Project was completed and an action plan to streamline and improve procurement procedures has been shared with the government, which is under implementation. The PIU Audit for 2012 and 2013 has been completed and that for 2014 is being contracted. A firm has been shorlisted to carry out the Technical and the Financial Performance Review (2009-2011) and after finalization of the contract work is expected to commence from November 2014.
Procurement Procurement for 851 bid packages for construction works of houses have been completed and construction in 272 sites across the country is now complete.
Responsible ADB Officer Matthew Hodge-Kopa
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies
Ministry of Finance5 Mustaqillik Maydoni Square
Tashkent 100008
Republic of Uzbekistan
Ministry of EconomyRaushan GulyamovROULAMOV@MINECONOMY.UZUzbekistan Avenue, 45A Tashkent, 100060
Republic of Uzbekistan
Timetable
Concept Clearance -
Fact Finding -
MRM 25 Feb 2011
Approval 09 Sep 2011
Last Review Mission -
Last PDS Update 30 Mar 2015

Loan 2775-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
09 Sep 2011 16 Feb 2012 20 Apr 2012 31 Dec 2013 30 Jun 2015 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 200.00 Cumulative Contract Awards
ADB 200.00 09 Sep 2011 178.83 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 09 Sep 2011 178.61 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory - - Satisfactory

Safeguard Documents

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Evaluation Documents

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